One unit (≈1,000 sq ft) needs a full furnace replacement due to a cracked heat exchanger.

Hopefully no slab leaks, hvac replacement, roof replacement, window replacement, foundation repairs, hardscape repairs/replacement, etc in the first 3 years.How did you derive your 10% maintenance/cap ex (5% each) estimate when you did your initial underwriting?

A comp on the other side of town is 305k.

So...I'm considering replacing all bedroom furnishings. 

Cost seg is simply the art and science of teasing out the individual depreciable components of a multi-component asset.

.- Understand the potential CapEx expenses that will be unique to each subject property by determining the life-left of components that will need repair or replacement in due time.- Run a cash flow analysis.

Property overview (high level): Stand-alone commercial buildingLarger and more functional interior layout than the prior locationFully built-out commercial kitchen (hood, suppression, bar, etc.)Adjacent outdoor patio space already set up for dining (big upside)Comes with all FF&E includedNo residential component — pure commercial use  Deal structure (seller carry): Purchase price written at $1.2M~$1.0M attributed to real estate~$200k attributed to FF&E (included in the sale) Seller financing on $900kBuyer cash in at closing: ~$275kInterest-only period initially (no balloon language currently in the contract)Target hold: 5 years, then refinance into a 25-year commercial loan  Business context: The restaurant historically did ~$950k/year in revenueWe are owner-operatorsConservative projections show the business can remain profitable even with slower $1k days mixed inGoal is consistency, margin cleanup, and NOI growth — not aggressive expansion  What I’m hoping to get feedback on: Does this structure make sense from a commercial real estate perspective?

Suspended LTR depreciation/losses often aren’t lost, they can carry forward and may be released when you sell, so the “can’t use it” point may be overstated.Real estate sale taxes aren’t just 15–20% LTCG: depreciation recapture, possible 3.8% NIIT, and state tax can raise the effective rate.A 1031 has strict deadlines (45 days identify / 180 days close); if you need more time, consider reverse 1031 or a more passive “parking” option like DSTs.STRs can potentially offset W-2 income, but it’s more complex than “100 hours”—material participation rules and documentation matter.Cost segregation can be powerful but only if the deal supports it; it accelerates depreciation and can affect future recapture.Consolidating into fewer properties can reduce operational risk, but watch market/regulatory/insurance volatility.Best next step: compare hold vs sell taxable vs 1031 with full tax/return components (recapture, NIIT, suspended losses, timing risk).Always consult with a CPA who specializes in real estate.

The location determines all the long-term income characteristics, which is critical because financial freedom is a long-term proposition.Financial freedom goes beyond merely replacing your current income; it entails maintaining your current lifestyle for life.

Self-storage facilities tend to have a lot of components that qualify for faster write-offs, especially things like climate-controlled units, interior build-outs, security systems, lighting, and other site improvements.